The BRICs Nifty 50: The EM & DM winners

Nov 2009Source: Global Investment Research

As BRICs growth continues, we look at the investment opportunities

The new BRICs Nifty 50 – EM and DM baskets

The credit crunch has acted as a catalyst for global economic rebalancing by accelerating the increase in US savings and the simultaneous rise in consumption in the BRICs. We estimate that two billion people could join the global middle class by 2030, mainly from BRICs. China and India are also set to dominate infrastructure demand over the next decade. These trends provide excellent opportunities for the best positioned companies from both the DM and EM markets. We have identified two new ‘BRICs Nifty 50’ baskets to help access this opportunity: 50 potential winners from the emerging markets.

Comparing the two

The baskets offer an opportunity to benefit from the BRICs theme both for dedicated DM and for global investors who can invest in EM directly. In addition, the advantage of two baskets is that investors can switch between the two as relative valuation and growth opportunities present themselves. On balance, while we expect both baskets to do well over the long run, we think that GSSTDM50 currently offers the best mix of liquidity, value and premium growth.